CVV and Conversion Rates

Yesterday on the Intellivative blog, there were two interesting blog posts:

  1. AVS & CVV: When to use it and why?
  2. Does CVV affect e-commerce conversion rates?

The second one is the most intriguing to me because it presents a quandary for e-commerce businesses.  CVV–that 3-digit code on the back of the credit card–is one of the recommended practices for fighting fraud; yet, if you use it on your e-commerce site, it appears that it might actually reduce the number of orders you may get from your site. The surprising mythbuster comes from the E-commerce Checkout Report from Get Elastic, which found:

Conversion rates were a full 40% higher where Top 100 retailers did not request a CVV (Card Verification Value), yet over 55% of them do.

The other interesting part about it was even though conversion rates were higher when the e-tailers didn’t use the card code, still over 55% of them still use it–which implies that either they didn’t know their conversion rate might be higher without it (did they try an A/B test on CVV code?) or that the fraud reduction benefits of the CVV code outweigh the potential higher conversion rate.

As a consumer, I think I would like it better if the site did ask for my CVV code–it shows they’re doing the due diligence to check for fraud which not only protects them, it helps me, the consumer. After all, if someone is out there trying to use my credit card (who wouldn’t have the CVV number), wouldn’t it be better if they were inhibited in their spending spree by web sites who do check the CVV code?

I always thank people who ask to see my ID with my credit card–they’re protecting me by doing that. Even though it’s a hassle for me to get out my ID and show it to them, I’d much rather they ask for it and make sure that I am the rightful owner of the card.

But apparently I’m an oddity. Either the CVV code is too complicated to find–or too much work to enter for many consumers shopping at the top 100 e-commerce web sites. Or maybe consumers just aren’t aware that the card code actually helps protect their identity and their credit card?

Thanks to Get Elastic for putting the work into this study and challenging our paradigms.


2 Responses to “CVV and Conversion Rates”

  1. 1 Mike March 18, 2009 at 9:07 am

    This stat (in the article referenced here) is very misleading. The Get Elastic study simply looked at top retailers and which tactics they were using in their checkout processes. They did not isolate tactics and perform split testing on each to determine what % of the conversion difference was attributable to each variable they tracked. So the fact that “Conversion rates were a full 40% higher where Top 100 retailers did not request a CVV (Card Verification Value), yet over 55% of them do.” doesn’t mean that the higher conversion rates of the sites that didn’t use CVV can be in any way attributed to or correlated with the use/non-use of CVV (correlation versus causation). So it is really a meaningless number, except to imply that you might want to test this.

    From their whitepaper:

    Obviously, factors besides checkout tactics will impact conversion and growth rates. We did not, for
    example, control for merchandising tactics, site response time, advertising levels, and so on. Also,
    correlation does not necessarily imply cause and effect.

  2. 2 krauseann March 18, 2009 at 9:28 am

    Thanks for your comment, Mike. You have some very good points that I didn’t take into consideration in my post. It would definitely be an interesting metric to test.

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